Archive for January, 2004

You may have heard lately, here and elsewhere, about the “jobless recovery.” While a number of the traditional leading economic indicators demonstrate that our nation is coming out of the economic malaise characterizing the past few years, unemployment and job creation statistics aren’t matching up. While the debate could become endless whether a “jobless recovery” is or should be an oxymoron where policymakers are concerned, economists are still grappling for an explanation as to why the economy is growing when its workers aren’t. A recent article suggests one explanation: the number of businesses investing in new equipment is increasing significantly, while the numbers reflecting businesses who invest in new employees isn’t budging.

In the story Player Piano, author Justin Lahart cites the statistics that document the problem: in the last five years, the cost of labor (the Employment Cost Index) has risen 21 percent, while the cost of equipment in the same period has fallen 9.2 percent. Tax incentives such as depreciation allowances further deepen the cost divide between man (and woman) and machine. As economist Paul Kasriel puts it: “People got too expensive and they’re still too expensive.”

This probably shouldn’t come as a huge surprise. After all, machines don’t require health benefits and vacation days. And why does it always seem that the managers who are the hardest to work for get along quite well with the machines? While machines and people both seem to need sick days when it’s least expected, it’s often easier to get the machines up and running at full capacity than to accommodate disability, pregnancy, and family leaves. Aside from the occasional hardware and software incompatibility, machines often do better than workers at communicating with each other and working together successfully. Technology advances are always boosting a machine’s productivity, and we thought that would work with humans as well, as cell phones, web browsing and e-mail started taking over everyone’s off-duty hours and vacation time. Machines handle burnout much better than humans–you just get a new one or replace a part, while the toll of constant stress and fear of unemployment is harder to quickly fix in human beings.

However, machines and humans need each other. Who is going to build all the machines if all the manufacturing jobs go away? It appears that the answer in the short run may be workers in China and India and other companies around the globe rather than workers in the U.S. But who is going to buy the things that the machines make, if no one here has income that makes discretionary spending possible? Moreover, if employers and insurers don’t help subsidize the cost of health care, we all know that the American taxpayer pays the price. We need healthy, educated, and skilled workers to design the machines, run the machines and fix the machines’ malfunctions, and to step in where a human touch is and will always be needed.

And preliminary attempts at creating glitch-proof voting mechanisms notwithstanding, machines aren’t going to be doing any voting in the 2004 elections. People are, and the candidates that promote business interests and the purchases of yet more machines with tax breaks and incentives, without considering the interests of human workers, may just find that a machine isn’t an adequate substitute for the American worker after all.

“It ain’t over until it’s over” appears to be the rallying cry of those in the U.S. Senate fighting to save American workers from overtime “reform” this year. Although the proposed regulations of the Department of Labor limiting overtime protections for millions of workers are slated to go into effect by March 31, 2004, the Senate has delayed action on the appropriations bill funding Labor and several other key departments in response to the Administration’s refusal to delay the implementation of the new regulations. The departments at issue are only funded until January 31, so someone will have to cry uncle soon. Let’s hope it’s not the American worker who pays the price, although by all indications, that may very well be the ultimate outcome.

Keep contacting your members of Congress, especially your Senators. This is such a key battle, and it isn’t over yet, so it’s very important that your legislators know where you stand.

In this election year, there’s a new immigration proposal on the table, submitted by the Bush Administration. This proposal is of special concern to undocumented workers residing in the United States, as it would be an amnesty program of sorts that would permit them to legalize their employment status while they work in the United States. However, the proposal is already under heavy fire from both the left and the right and both Democrats and Republicans. Some feel it doesn’t go far enough, while others believe it goes too far. While it is unlikely that any significant immigration reforms will be passed in an election year, debate on the proposal will certainly spark debate on the plight of undocumented workers, and could possibly lead to some creative yet feasible solutions for a very complicated policy issue.

In a speech on January 7, the President offered a basic outline of his proposal, called “Fair and Secure Immigration Reform.” Under the program, an undocumented worker could apply for temporary worker status here for an initial three year period, with all the employee benefits, like minimum wage and due process, accorded to those legally employed. Workers who are approved would be permitted to travel freely between the United States and their home countries, and would also be permitted to apply for a green card granting permanent residency in the United States. (See Broad New Rights.) The program cannot be called a true amnesty program, however, since only workers with jobs or job offers are eligible. In fact, an official commenting on the program emphasized that “there is no linkage between participation in this program and a green card, and it is temporary in nature — one must go home upon conclusion of the program.” (See Washington Post article.)

As an incentive to participate in the program, workers would be offered the opportunity to established tax-preferred savings accounts that the worker could use for either retirement or for a nest egg to buy land or capitalize a business. They would also be allowed to collect retirement money that includes U.S. Social Security checks and benefits paid by their home government, apportioned according to how many quarters they had worked in each country. While Social Security money already can be sent abroad, often workers’ home countries penalize them for years spent in the United States. (See Washington Post article.)

The proposal, which would be the most broad overhaul of immigration policy since the Reagan administration, is undoubtedly guided by political motivations, as the President courts votes in an election year. The proposal is designed to appeal to Latino voters as well as improve relations with Mexican President Vicente Fox, and may also appeal to moderate Republicans who support a more inclusive party. However, some Latino groups have already criticized the plan as an illusory road to citizenship that provides little incentive to participate. (See Border Politics) Business groups, whose members rely on a steady stream of unskilled workers, yet face penalties for knowingly hiring undocumented workers, also support the proposal, as it would provide a legal source for workers who they claim will take jobs that American-born workers will not. (See Undocumented, Now Front Row.) But to the conservative Republicans who most consistently support the president, this proposal goes way too far by allowing large numbers of those who have entered the country illegally to legalize their status. One leading immigration foe in Congress, Rep. Tom Tancredo (R-CO), called the proposal a “step backward.” (See Reuters article.) Another outspoken foe of the plan, Rep. Elton Gallegly (R-CA), asserted “Based on the conceptual plan as laid out, it’s highly unlikely it will ever see the light of day” in Congress.” (See Hill Cool to Bush Immigration Plan.)

While the president is to be praised for raising the politically sensitive issue of illegal immigration and for proposing solutions that recognize the role played in our economy by undocumented workers, the proposal as outlined generates a number of concerns. Like other employment-based work visas, a worker’s fate is tied to his or her employer, who must sponsor the employee for the program. Since a worker is no longer eligible for the program once no longer employed, employers are required to report the employment status of workers in the program. (See the President’s remarks). While workers in the program are theoretically eligible for job protections such as minimum wage and anti-discrimination laws, what is to prevent an employer, when challenged by a mistreated worker, from terminating the worker’s employment and putting him or her at risk for deportation once the government learns the worker is no longer eligible? It is now the position of federal enforcement agencies such as the U.S. Department of Labor and the Equal Employment Opportunity Commission that undocumented workers are entitled to these kinds of legal protections, yet undocumented workers are nonetheless exploited by unscrupulous employers who wield deportation as a threat to forestall efforts to enforce those rights. The only difference with this proposal is that rather than the mere threat of deportation that currently exists, the government will already have in its hands the names of workers no longer eligible for the program, which could make the situation worse than it currently is, rather than better, if the goal is to reduce exploitation.

Another concern is that the workers who participate in the program are offered no guarantees of ultimately receiving permanent resident status or citizenship. The President was clear that program participants will not be allowed to receive special consideration for a permanent legalized status or pass others who have followed the appropriate steps legally to secure their status. Unless the number of permanent visas is increased, workers could face the expiration of their temporary worker status well before their application for permanent status is approved. (See Bush Outlines Plan.) Finally, there are real concerns that the existence of the guest worker status will be used to depress wages for other workers. Employers will have to certify that they cannot find American-born workers for the jobs they offer, but what is to prevent them from offering these jobs at wages so low that only temporary workers will consider them? (See American Jobs.)

Whether a final version of this proposal ever sees the light of day is unknown at this time. However, a sound immigration policy that truly protects undocumented workers must provide a real road to citizenship, reduced dependence on employers’ cooperation, wage protections above and beyond the inadequate minimum wage, and real protection against retaliation. This proposal does not yet offer those guarantees, and it is unlikely that the President will be able to generate the support he needs from his own party for even this proposal, much less a proposal that does more to protect the undocumented worker.